1. Home
  2. |Insights
  3. |New Jersey District Court Adopts Rule Requiring Broad Disclosure of Litigation Funding

New Jersey District Court Adopts Rule Requiring Broad Disclosure of Litigation Funding

Client Alert | 1 min read | 07.07.21

The U.S. District Court for the District of New Jersey adopted a new local rule, starting on June 21, 2021, requiring disclosure by litigants regarding the use of litigation funding. While several federal courts have implemented rules requiring disclosure of the existence and identity of litigation funders, New Jersey’s rule goes much further, requiring all parties to further disclose:

  • the scope of the funder’s rights to approve of litigation decisions or settlement decisions; and
  • a brief description of the funder’s financial interest in the litigation.

The new rule is designed to promote transparency in the litigation process and thereby ferret out the “true” decisionmakers in the litigation. It may be used to prevent ethical violations by counsel as well as to ensure compliance with state laws against champerty and maintenance.

The new rule contains a number of ambiguities, however, that raise concerns that it may unnecessarily delay the litigation by increasing the frequency of motion practice over discovery. For example, following the mandatory disclosures cited above, the new rule specifically contemplates the possibility of further discovery upon a showing of “good cause,” or where “such other disclosure is necessary to any issue in the case.”

In addition, as drafted, the rule may require disclosure of contingency-based attorney engagements, as it requires disclosure of “any person or entity that is not a party” who is funding litigation costs in exchange for “a contingent financial interest based upon the results of the litigation.” Similarly, the rule may encompass common contractual indemnification agreements, as it requires disclosure of non-parties providing litigation funding in exchange for any “non-monetary result that is not in the nature of a personal or bank loan, or insurance.”

The new rule goes into effect immediately, applies to all pending cases, and requires the filing of the required disclosures on or before August 5, 2021. In the coming year, New Jersey federal courts will likely be called upon to resolve a number of disputes over the scope and effect of the new rule.

Insights

Client Alert | 14 min read | 11.01.24

Protectionist Trade Policies in the New Administration: A Question of Degree

Regardless of what happens in the U.S. elections on November 5, one theme is clear – protectionist policies in international trade are here to stay. To some extent, the key difference between the trade policies of a Harris administration and a second Trump Administration may be one of degree. Vice President Harris is expected to continue the more cautious, incremental approach to trade policy favored by the Biden Administration. A second Trump administration, on the other hand, is expected to pick up where it left off and aggressively use the trade tools at its disposal to try to reset and renegotiate trade relationships with many of the U.S.’s trading partners—particularly those countries with whom the U.S. has a trade deficit....